Every two years, a Washington-based public policy research foundation grades the nation’s governors and issues a comprehensive fiscal report card. The A-F mark assigned each governor by data analysts at The Cato Institute is based on hard-and-fast numbers and narrow parameters.
Cato asks a most basic question: Who cuts taxes and spending the most? It’s not a beauty contest, unless you happen to appreciate the beauty of sound fiscal policy.
This 11th biennial Cato report card just released confirms that numerous individual states, led by fiscally conservative governors, have taken steps to counter a sluggish U.S. economy since 2010. Meanwhile, others, governed by tax-and-spenders who don’t seem to get it, are gasping for air and are worse off than two years ago.
Four governors earned “A”s; 17 made “B”s; 11 made “C”s; 11 made “D”s; and, believe it or not, five flunked. (Mississippi’s governor got a pass because he has been in office only briefly; and Alaska’s governor is excluded due to state budgeting “peculiarities”).
Among the bottom five, one man achieved the dubious distinction as worst of the worst, Illinois Gov. Pat Quinn. On a 100-point scale, Quinn manages to collect only 16, one less point than Connecticut’s equally inept Dan Malloy. By contrast, Washington’s Chris Gregoire rates an “F” but earned 38 points.
Keep in mind this is not some random ranking. Cato aggregates data from the National Association of State Budget Officers, the National Conference of State Legislatures, the Tax Foundation, each state’s budget agency, and reports published in a the wonky journal State Tax Notes (not exactly the Drudge Report or Daily Kos).
“The grading mechanism is based on seven variables,” writes report card author Chris Edwards, Cato’s director of tax policy studies.
Naturally, Cato’s study red flags Quinn’s 2011 personal and corporate income tax hikes (“a massive tax increase of $7.3 billion a year … the largest increase of any state in many years”). But he also is scolded for approving “special breaks to companies that threaten to leave” and “fiscal goodies to the film and TV industries”.
And not only does the author find Illinois’ spending under Quinn “irresponsible”, Cato’s Edwards lambasts Quinn for increasing this spending “at a faster clip than in most states in recent years” and then “issuing debt to paper over the state’s budget problems.”
The data reveals an incompetent governor who may yet rue the day he once publicly supported an amendment (which ultimately became law) to give Illinois voters gubernatorial recall power. Oops.
Especially embarrassing for Illinois residents is the stark contrast between the mule-headed actions pursued by Quinn and the sound leadership exhibited by governors in other states, where being last and making “F”s is not a source of civic pride as it apparently is in Springfield.
Kansas Gov. Sam Brownback, who is highest rated in the report with 69 points, delivered the “largest tax cuts of any state in recent years” saving taxpayers “more than $800 million a year”.
In Florida, Gov. Rick Scott has moved to increase the exemption threshold for taxes on “tangible personal property” among businesses. By moving the exemption from $25,000 to $50,000, the tax will be terminated for 156,000 businesses.
In state after state, pro-growth, fat-trimming governors are spawning economic resurgence even as the federal government foments uncertainty by its failure to address a $494 billion tax increase scheduled to kick in Jan. 1, 2013.
The Illinois Policy Institute forecasts that the arrival of this Taxmageddon in the new year will hit Illinois households with an average tax increase of $3,452.
Thanks to governors who have worked with legislators to lower tax burdens and end reckless spending, renewed economic tremors caused by expiring George W. Bush-era tax rates presumably would be softened in more robust states, should the expirations come to pass.
Meanwhile, in Illinois, Taxmageddon is not a worst-case scenario. It’s reality.